Global Equity Funds Draw Biggest Weekly Inflow in Five Weeks

Global equity funds witnessed a surge in investments in the week through Jan. 29, 2025, with a robust $15.2 billion net purchase, marking the largest weekly net purchase since Dec. 25, 2024. This surge in investment can be attributed to several factors, including a record rally in European shares, softened U.S. tariff expectations on China, and prospects of further rate cuts by major central banks.



The European equity market experienced a remarkable rally, with the STOXX 600 index reaching a new record of 540.49 on Friday, marking its sixth consecutive week of gains. This strong performance in European equities boosted investor appetite, contributing to the significant inflows observed in global equity funds.

The chart above illustrates the weekly inflows into global equity funds, highlighting the significant surge in investments during the week through Jan. 29, 2025. The $15.2 billion net purchase represents the largest weekly net purchase since Dec. 25, 2024, indicating a strong appetite for equity investments.



The prospect of softened U.S. tariff expectations on China also contributed to the surge in investment, as it reduced uncertainty and increased investor confidence. This positive sentiment towards the global trade landscape encouraged investors to pour money into global equity funds.



The chart above compares the performance of the U.S. and Chinese equity markets as of Jan. 29, 2025. The positive sentiment surrounding the potential easing of U.S. tariffs on China is reflected in the strong performance of both markets, with the U.S. equity market up 7% and the Chinese equity market up 30% so far in 2024.



The expectation of further rate cuts by major central banks, such as the European Central Bank, fueled optimism and encouraged investors to pour money into global equity funds. This favorable monetary policy environment contributed to the significant inflows observed in the week through Jan. 29, 2025.

The chart above displays the interest rate projections of major central banks as of Jan. 29, 2025. The expectation of further rate cuts by the European Central Bank and other major central banks has contributed to the positive sentiment in the global equity market, encouraging investors to allocate more funds to equity investments.

In conclusion, the surge in global equity fund inflows can be attributed to a combination of factors, including a record rally in European shares, softened U.S. tariff expectations on China, and prospects of further rate cuts by major central banks. As investors continue to seek opportunities in the global equity market, it is essential to monitor these trends and assess the potential risks and opportunities associated with the sectors and regions that received the largest inflows.